229055.PDF - Surface Transportation Board

BALL JANIK LLP
A T T O R N E Y S
1455 F STREET, NW, SuiTC 225
WASHINGTON, D.C. 20005
\vww.baWanlk.coin
TELBPHONB 202-e38-3307
KARL MORELL FACSIMILE 202-783-6947 kmorell@dc.bjllp.com
March 29,2011
E-File
Of!J.-w w! ;^-c=3sdlng8
Ms. Cynthia T. Brown HAR 2 9 2011
Chief, Section of Administration
p »•„•
Office of Proceedings
Public Reomd
Surface Transportation Board
395 E Street S.W.
Washington, DC 20423-0001
Re:
STB Finance Docket No. 35410. Adrian & Blissfield Rail Road
Company - Continuance in Control Exemption - Jackson &
Lansino Railroad Companv T^L!? ^S^H
STB Finance Docket No. 35411. Jackson & Lansing Railroad
Company - Lease and Operation Exemption - Norfolk Southem
Railway Companv Q3f C~c^
STB Finance Docket No. 35418. Jackson & Lansing Railroad
Companv - Trackage Rights Exemption - Norfolk Southem
Railwav Companv ^ n ^ ^^—y
Dear Ms. Brown:
Adrian & Blissfield Rail Road Company ("ADBF") and Jackson & Lansing
Railroad Company ("JAIL") hereby respond to the letter filed by Yreka Westem Railroad
Company ("YW") with the Surface Transportation Board ("Board") on March 23,2011,
requesting leave to withdraw Its withdrawal letter filed on February 17, 2011.
On February 10, 2011, YW filed comments In these proceedings making
false accusations about ADBF and JAIL. In its Reply filed February 25, 2011, ADBF
and JAIL attempted to set the record straight both by accurately explaining the business
dealings between Mr, Hammond, president of YW, and the ADBF railroads and
exposing Mr. Hammond's corrupt motive in filing the YW comments. As previously
PORTLAND, ORBOON WASHNOTON, D.C. BEND, OREGON

BALL JANIK LLP
March 29, 2011
Page 2
explained by Mr. Dobronski, president of ADBT and JAIL, Mr. Hammond offered to
withdraw the YW comments If Mr Dobronski would agree to reducing the amount Mr.
Hammond owed to ADBF and affiliated companies. After Mr. DobronskI refused to be
blackmailed, YW quickly withdrew its comments In two of the three proceedings without
correcting any of the false and defamatory comments.
After having submitted false Infonnation with the Board and defaming
ADBF and JAIL, YW has the audacity to cite to the Board's Canons of Ethics. Counsel
for YW cites to provisions goveming the treatment of witnesses and other litigants. But
YW has no witnesses presumably because YW could not find an individual willing to
perjure himself. In any event, the Board's Canons of Ethics do not require an Individual
falsely and maliciously attacked to tum the other cheek. Indeed, It is the obligation of
counsel for ADBF and JAIL, both to his clients and the Board, to bring these false and
malicious allegations to the attention of the Board.
While YW characterizes the Reply of ADBF and JAIL as vitriolic and
inappropriate, ironically YW does not dispute a single statement contained in the Reply.
Also, it is Mr. Hammond's conduct that is inappropriate and not the accurate portrayal of
that conduct in the Reply. To further conoborate the Verified Statement of Mr.
Dobronski and demonstrate Mr. Hammond's con-upt motive In filing the YW comments,
attached is the Affidavit of 6. Allen Brown II. Mr. Brown is a fbmner business associate
of Mr. Hammond. Mr. Brown explains that on February 10,2011, Mr. Hammond
informed him that YW had filed comments with the Board as part of a plan to take over
the JAIL rail line.
Rather than dwell on the Board's Canons of Ethics, YW would be better
advised to consult other provisions of 18 U.S.C. § 1001(a), which makes submitting
false or fraudulent statements to a Federal agency a criminal offense and 18 U.S.C. §§
875-877, which make extortion a Federal crime.
Respectfully submitted.
)

AFFIDAVIT OP B. ALLEN BROWN II
State of Michigan )
)ss;
County of Wayne )
B. ALLEN BROWN II, being first duly sworn, does depose and state as follows:
1.1 am President of Railmark Holdings, Inc.
2. Approximately two years ago, I was Introduced to Court Hammond when I
responded to a public listing showing that Yreka Western Railroad Company (YW) was for
sale. The listing was being brokered through Ozark Mountain Railcar. Court Hammond is,
and was, the President of YW.
3. At the time, I conducted some due diligence relative to the possible purchase of
YW. Through my due diligence, I learned that YW was deeply in debt and in serious
financial trouble. Court Hammond explained a very complicated debt structure to me
relative to YW. During this due diligence period, at the request of Court Hammond, I
loaned approximately $13,000 to YW to stave off the foreclosure on some of their assets.
To date, I have not been repaid by YW or Hammond.
4. I continued to have on-going discussions with Hammond regarding the
acquisition of YW. The process was repeatedly delayed because requested financial
documentation was often not available and an inability to obtain accurate information as to
the true total iiabilities of YW. At one point, I was contacted by an Internal Revenue Service
Revenue Officer, David Barbearo, who informed me of substantial federal tax liens which
existed against YW stemming from non-tender of employee tax withholdings (941 tax and
CT-1 tax).
5. Because of the serious tax and liability issues surrounding YW, I informed
Hammond that I would be unable to acquire YW until such time that the issues were
resolved or a plan for their resolution was in place.
6. I continued to have business dealings with Hammond, In early 2009, YW had
begun to become.very involved in brokering car storage locations for General Electric
Railcar Services (GERS). Hammond was requesting my assistance in identiiying locations
where railcars could be stored, I referred Hammond to Adrian & Blissfield Rail Road
Company (ADBF) and to its President, Mark Dobronski, ADBF Is also the parent company.

inter alia, of Charlotte Southem Railroad Company (CHS) and Jackson & Lansing Railroad
Company (JAIL).
7. 1 am aware that in Summer 2010, Hammond came to Michigan to meet with Mark
Dobronski of ADBF. I was not directiy Involved In any of the discussions or business
dealings between Hammond and Dobronski.
8. In late November 2010, Hammond asked me, through my company. Rail Freight
Solutions, Inc. ("RFS"), to supply agency services to YW regarding the GERS storage cars
which were being located on the ADBF rail lines, in particular, RFS was to prepare waybills
for cars, inventory cars inbound and outbound, and prepare monthly summaries.
9. I quickly found that what recordkeeping had been done by YW was disorganized
and filled with inaccuracies, Dobronski had reported to me frustration with bad waybills
containing inaccurate car numbers, and Invalid routings, which had been supplied by YW;
the failure of YW to provide any notification of inbound cars enroute; and, a very
disorganized system of notifications from YW as to cars to move outbound. Dobronski
emphasized the importance of ADBF being supplied with accurate and valid waybills
before a car is released. YW had been supplying inaccurate and invalid waybills, which
were causing problems with moving cars when delivered to interchange carriers. I began
to put in place a simple, easy-to-follow, easy-to-manage system.
10. However, about the time that I was attempting to implement the new system, 1
learned that Hammond had reached an impasse in negotiations with ADBF. In fact. I was
shocked to learn from Dobronski that Hammond had no contract in place with ADBF, yet at
the same time Hammond was representing to GERS and me that he had a contract in place
with ADBF. When 1 confl'onted Hammond with this Information, Hammond represented to
me that he had a "verbal contract" with ADBF. However, I also learned from Hammond that
he was still negotiating prices with ADBF, which seemed to rebut that even a "verbal
contract" existed.
11. In early January 2011, Hammond represented to me that he had a plan to take
over the JAIL operations at Lansing, Michigan. At the time, I told Hammond that he needed
to focus-on getting his operations organized so that his car storage arrangement with
ADBF/JAIL could work, and he could resolve his serious debt Issues, as opposed to
scheming how to get his hands on the JAIL line.
12. Relations between ADBF/JAIL and YW/Hammond continued to deteriorate. In
January 2011, I was aware that Dobronski was asking for payment of YW's past due
invoices. It appeared to me that, Instead of paying the bills, Hammond was using the
opportunity to try to pressure ADBF/JAIL into reducing their bills further, claiming that
^

GERS would not pay Hammond until the bills were reduced. 1 was also aware that, In fact,
GERS had already paid Hammond.
13. Hammond then asked me to intercede and use my professional relationship
with Dobronski to attempt to persuade Dobronslo to reduce the ADBF/JAIL invoices. I
reviewed data supplied to me by Hammond and data supplied to me by Dobronski, I
attempted to be fair and impartial In my assessment of the numbers supplied to me. I
found that the numbers calculated by both were within a few thousand dollars of eacli
other, however Hammond had incorporated numerous "offset" numbers which effectively
reduced the amount by approximately 67 percent. When I discussed these offsets, I
learned that these offsets had no legitimate basis and I told Hammond so.
14. On February 10, 2011, at the request of Hammond, I met wltli Dobronski and
his wife for dinner to discuss resolving the issue of unpaid invoices. I persuaded Dobronski
to agree to accept the number calculated (without offsets) by Hammond, and Dobronski
agreed to my suggestion. Further. Dobronski agreed to have bis in-house attorney prepare
a simple settlement agreement which formalized that dollar amount However, later than
evening, after I informed Hammond that Dobronski had agreed to his "number" '(without
offsets), Hammond then disclosed to me that he had retained Fritz Kahn, a'Washington, DC
attorney, to represent YW before the Surface Transportation Board and that YW had a plan
to wrestle the JAIL line in Lansing, Michigan from ADBF. That same evening, Dobronski
telephoned me when he returned home to report that he had Just learned that YW had filed
comments before the Surface Transportation Board.
Further, deponent sayeth naught
Subscribed and sworn to before me
this litl'^day of March, 201:
BARBARA A. UVSATER
Noiaty PubHo, St8t» of Michigan
Courtt/ofLerUNvee
My CommissKin fiuMs 0«e. 2t, 2Dt3
ACTiiBiiHlwOeunlycr